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What State Failure Looks Like

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Schwarzenegger’s Shock Therapy —

The Poor Pay For The Sins Of The Rich

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Edit: Somehow half this post was lost in sending . . . .

Edited by copydude

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The press has been amazingly silent on this historic economic breakdown of a major state. I'm glad to see someone getting into the details, even if I don't agree with everything they say.

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California has a non-recourse loans regime: the low earners who got their dream houses with dodgy mortgages were basically paying subsidised rent for a few years, then fecked off with no obligations.

Why should tax payers further subsidise them now they have no jobs?

Same kind of liberal free-for-all rubbish that caused the problem in the first place.

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I'm afraid she somewhat set the scene with this piece of idiocy;

Around the world, government is seen as the last hope to stimulate a comatose economy.

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Anyone watched it yet? I'm 4 mins in and it's telling me that it'll be tough as Hell (although telling me a wrestling class is cancelled isn't too scary), which is obvious to anyone with a brain.

Is there any insight or other proposals?

Edited by bogbrush

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Anyone watched it yet? I'm 4 mins in and it's telling me that it'll be tough as Hell (although telling me a wrestling class is cancelled isn't too scary), which is obvious to anyone with a brain.

Is there any insight or other proposals?

This video was made earlier in June. Since then it has got worse. Naomi was looking at 5bn being cut from the schools. Today we learn it is 11bn.

I imagined of course this would upset the Schadenfreude Set on HPC. They equally have no thought for anyone else in society.

The fact is, we pay taxes for things like schools and hospitals and parks and unemployment. Like ill-health, losing your job can happen to anyone.

No one was knowingly paying taxes to bail out the financial sector.

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Cali was in a hole before the financial crisis. What impacted the states budget more? Did it bail out any banks itself? Or is it falling tax receipts and difficulty borrowing more money which destroyed its budget. Remember they had huge deficits before the crisis anyway.

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This video was made earlier in June. Since then it has got worse. Naomi was looking at 5bn being cut from the schools. Today we learn it is 11bn.

I imagined of course this would upset the Schadenfreude Set on HPC. They equally have no thought for anyone else in society.

The fact is, we pay taxes for things like schools and hospitals and parks and unemployment. Like ill-health, losing your job can happen to anyone.

No one was knowingly paying taxes to bail out the financial sector.

Looks like they don't pay enough taxes for the stuff they want.

In any case, exactly how much of the California budget deficit has gone to the banks? Nothing, I thought.

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California has had a number of budegtary crises over the past decade, the current situation is not neccesarily wholey a product of the recent credit crunch though it is a major factor. Somehow the bicameral system allows voters to vote for an executive the promises various expenditure increases and improvement programmes. But the public also votes for a second chamber often at different times from the executive, with rebound voting tendancies to reign in any extentions in state expenditure. This schizophrenic systemic voting behaviour has the habit of leaving the states' coffers nearing crisis point on a recuring cycle. One cannot have ones cake and eat it. For California read the US.

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They allowed them to flood in, then ran out of cash............whats the shock?

If (as we are under Labour) allow MASS inports of unskilled, unwilling (to work) "Workers" then what do you think will happen to us?

Mike

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States just should never be allowed to run deficits. Nor should countries, really.

If everyone lived within their means, then these problems just wouldn't happen.

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States just should never be allowed to run deficits. Nor should countries, really.

If everyone lived within their means, then these problems just wouldn't happen.

Bah. Bucket of smegma. A whole buncha diff'rent problems would happen.

I say stiff the creditors! Bwahahahahaha!

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Posted this on the Ryanair thread about them pulling out of a part of the UK, applies to California..

Still love seeing companies stand up to ideological driven governments who hurt their business. The hammer businesses wield is the jobs they provide. If a state is hostile to the business, the business can draw a line in the sand, past which point it will take the jobs away from that area.

I think with the US cap'n trade all the major polluting corporations should band together, and draw out how many factories they will shut down if the legislation passes. And then all close down all those factories on the day the legislation passes. Not this drip, drip usually seen that gives the politicians cover.

The untold story in the media of California's meltdown is most of the productive enterprise which actually make stuff, knows as the polluting industry, left the state due to the heavy regulations and taxation on their business. The state lost a great deal of its productive base. An example is California used to have 8 major auto plants, and the related supply chains. This was into the hundreds of thousands of good jobs. But today the state only has 1 major auto plant, the other 7 had closed down and moved production elsewhere, and closed down before the latest crash in the industry.

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California has a non-recourse loans regime: the low earners who got their dream houses with dodgy mortgages were basically paying subsidised rent for a few years, then fecked off with no obligations.

Why should tax payers further subsidise them now they have no jobs?

Same kind of liberal free-for-all rubbish that caused the problem in the first place.

They should not however non recourse loans are good better than the UK situation.

With a nice deposit a bank shold be able to lend in this manner it should keep them honest they didn't so they and their investors hould pay for their mistakes.

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So when California goes bust, what will be the ramifications for the UK?

I dunno really; I don't think there's a direct economic connection but it would be nice to think it might wake everyone up. I don't think so with great faith though, that'll probably only happen when it all strikes home (as it is already for the poor sods losing their jobs/houses). :(

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Posted this on the Ryanair thread about them pulling out of a part of the UK, applies to California..

Still love seeing companies stand up to ideological driven governments who hurt their business. The hammer businesses wield is the jobs they provide. If a state is hostile to the business, the business can draw a line in the sand, past which point it will take the jobs away from that area.

I think with the US cap'n trade all the major polluting corporations should band together, and draw out how many factories they will shut down if the legislation passes. And then all close down all those factories on the day the legislation passes. Not this drip, drip usually seen that gives the politicians cover.

The untold story in the media of California's meltdown is most of the productive enterprise which actually make stuff, knows as the polluting industry, left the state due to the heavy regulations and taxation on their business. The state lost a great deal of its productive base. An example is California used to have 8 major auto plants, and the related supply chains. This was into the hundreds of thousands of good jobs. But today the state only has 1 major auto plant, the other 7 had closed down and moved production elsewhere, and closed down before the latest crash in the industry.

You can be sure that pollution regulation was not the only reason manufacturing has dried up in California. The problems of the US car manufacturers are well documented, including inflexbile unions, profligate executives, outdated production processes and inferior product ranges to name but a few.

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For the impact if it stays in California not that much. But it looks to be spreading there is rumours that Michigan, Ohio, Illinois and New Jersey are all running out of cash too and unable to come up with budgets.

Also many city governments and school districts are heading to bankruptcy if their revenues do not pick up.

People in McWorld jobs cannot pay for the extravagant lifestyles of the administrators in the government.

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You can be sure that pollution regulation was not the only reason manufacturing has dried up in California. The problems of the US car manufacturers are well documented, including inflexbile unions, profligate executives, outdated production processes and inferior product ranges to name but a few.

I agree there is more to it. Another unspoken factor.. the cost of energy in the state. The cost of electricity is two or three times what it is in other states. And for some manufacturing 10% of their cost is electricity to manufacture products. In some product areas this isn't far behind labour. Well in California that 10% cost jumps to over 20% as it is double.. and that difference might be the entire profit margin.

Even that isn't all the factors there are others such as Labour Laws, Cost of Living for employees, Health Care Laws, logistics(which I think the state is top notch in), Quality of Workforce, maturity of supply companies, Litigation risks, etc..

Someone in the state, like say the Governor should have been asking why corporations were leaving the state. He might have even talked to them directly

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Why should tax payers further subsidise them now they have no jobs?

Same kind of liberal free-for-all rubbish that caused the problem in the first place.

+1 Shut the welfare state down.

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